Litigation privilege: this applies here to documents created for the dominant purpose of obtaining legal advice; or information or evidence, in connection with litigation which is reasonably contemplated.
The case was heard in the context of interviews which were conducted by insolvency practitioners appointed following the discovery of a massive fraud and associated dent in the company’s finances. The court took a pragmatic approach to the dominant purpose test.
It is an established prerequisite to a claim for litigation privilege that a “dominant purpose” test must be satisfied. That is, the relevant communication must be for the dominant purpose of obtaining information or advice in connection with existing or contemplated litigation.
The decision in this case demonstrated that where the court considered that the office holder had already decided to bring proceedings against a respondent, and that he or she was simply seeking information as to their potential defence, an order was more likely to be refused. In other words, the court may be readily persuaded that witness interviews conducted at that stage were for the dominant purpose of evidence-gathering for potential proceedings, and therefore that litigation privilege applied.
However, the court has a broad discretion as to whether to order disclosure or the examination of witnesses under its statutory powers, and will balance the requirements of the office holder against any possible oppression to the respondent. That is, the balance which insolvency practitioners must strike can be subtle.
Here, the court also found that other documents created as part of the administrators’ investigation into the fraud (not being those opposed to the underlying contemporaneous documents that informed that investigation, which had already been disclosed) were not relevant.